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Written by Laura Jean Holton
on September 11, 2017

Without calculating conversion rate, you have no way of knowing how much your website is contributing to sales. Furthermore, you cannot know how much each sale is costing you. This means that, without a conversion rate, you have no assurance that your sales revenue is even contributing to a positive Marketing ROI.

How to Calculate a Website Conversion Rate

 

Conversions fall into two categories: how many visitors are turning into leads and how many of these leads are converting into customers.

Visitors to Leads

To determine visitor-to-lead conversion rate, you first need to define what actions turn a visitor into a lead.

This can be anything that shows that a visitor is potentially interested in purchasing from your business. It could be a download of premium content, a subscription to your newsletter, the starting of a free trial — whatever you have on your website that provides you with users’ contact information and allows you to nurture the user toward a sale.

website conversion rate

The traditional method for calculating visitor-to-lead conversion rate is simple. Just take the number of leads and divide this by the total number of visitors to your site. Then, multiple this number by 100 to arrive at a percentage:

 

(Number of leads / Total number of visitors) x 100

 

Leads to Customers

You can count a lead-to-customer conversion whenever a visitor to your website completes a purchase. Using the traditional method, you calculate this by dividing your number of customers by the total number of leads and multiplying the resulting number by 100:

 

(Number of customers / Total number of leads) x 100

 

website conversion rate

 

What to Ignore

The problem with the above calculations is that they include irrelevant data. Many people who visit your website, some may even technically become leads, are never going to become customers because they are not part of your target market.

For instance, if your company only sells in the U.S., visitors from other countries will never become your customers. They may still visit your website (if it contains useful information) and may even become leads because they want premium content.

 

website conversion rate

 

For an accurate picture of how well your website is converting users into leads and customers, you need to eliminate from the calculation all the users who are unable to buy from your company.

For your lead conversion rate, you need to use the formula:

Total goal completion / Visits to your website from users in your target market

For your customer conversion rate, the formula would be:

Total sales / Leads in your target market

Again, you can multiple the results by 100 to receive a percentage.

 

Conversion Rates and Lead Values

 

Even eliminating users outside your target audience is insufficient for an accurate depiction of conversion rate. You also need to take lead values into consideration, which you can calculate using this formula:

Value of sale / Leads in your target market

 

The value of sale in the equation should be profit, not revenue. Now, you can figure out how many leads you need each month and how much you can afford to spend on marketing:

Desired revenue / Lead value

 

web conversion rate, lead value

 

Metrics to Track

 

Finally, you need to track other metrics to see what is impacting your conversion rates.

Traffic Sources

As well as finding out how visitors arrive to your site, whether as direct traffic, through search, or by referral, you need to know how this has an impact on your conversion rates.

Visitors’ Interactions

It is important to watch visitors’ behavior, even if nothing they do is directly linked to a conversion. The pages they view, the comments they leave, and other actions are all important — it will help you figure out how to turn interactions into conversions.

website conversion rate

New Visitors

New visitors interact with your site in a different way than returning visitors. You need to monitor the actions they take and see where they arrive before they leave. You can use this information to improve usability and reduce bounce rates.

Returning Visitors

Returning visitors had a reason to come back to your site — you need to identify that reason. You should also compare how the actions of returning visitors differed from those who failed to come back. Lastly, if returning visitors failed to convert previously, a repeat visit is your chance to figure out what you can do to push for a conversion.

Cost of Conversion

If you have only a few visitors converting or you are pouring many resources into each conversion, your cost per conversion rate will be high whereas your ROI will likely be low. You need to monitor costs to ensure this is never the case.

Bounce Rate

A high bounce rate reduces the chance of a good conversion rate. Factors that may contribute to bounce rate include design, usability, and page load time.

 

website conversion rate, bounce rate

 

Time on Site

Measure how long those who convert spend on your site compared to those who fail to convert. Find if any particular pages are contributing to high exit rates.

CTAs Clicked

When visitors click a CTA, they are at the point of converting. If they leave the page without converting, you can be sure that you need to improve the landing page. Run A/B testing to optimize every element.

 

Tracking Tools

 

If you were to just calculate conversion rates using the traditional method, you would only need access to basic data. However, when you need to eliminate visitors who are not in your target audience, add lead values to the picture, and measure many other metrics, you need more complex tracking tools. The good news is that you have several options:

  • Google Analytics. The most popular service for web analytics, Google Analytics provides everything from simple metrics to detailed information.
  • Kissmetrics. Another analytics service for a range of skill levels, Kissmetrics is helpful for tracking individual users.
  • HubSpot CRM. This suite of tools allows sales and marketing teams to track buyers’ journeys.
  • Crazy Egg. With Crazy Egg, you will see how visitors engage with your website for a better understanding of their behavior.

Without accurately calculating conversion rate, it is impossible to optimize your website. You need to know who is coming to your site, from where, why, and what they are doing before you can optimize a single page.

 

Unsure where your visitors are coming from? Unable to track them accurately? Struggling to close leads?

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